Moderating role of Institutional Culture on the Relationship between Strategic Leadership and Performance of The National Government Administration in Nairobi County, Kenya

Abstract

Performance is key and crucial to the success of any organization as it helps set goals, and drives the organization to achieve the goals. However, there has been a problem of performance in National Government Administration which emulates from strategy development, and implementation and leadership competency. This study examined the moderating effect of institutional culture on the relationship between strategic leadership and performance of the National Government Administration. The specific objectives were to determine the influence of strategic direction setting, assess the influence of core competence exploitation, investigate the influence of risk taking, evaluate the influence of innovation capabilities and establish the effect of institutional culture on performance of National Government Administration. Additionally, the study sought to establish the moderating effect of institutional culture on each of the relationships above. The New Management theory, Institutional theory and the Upper Echelons theory anchored this study. Positivism research philosophy and explanatory research design were adopted for the study to provide the researcher with meaningful insights on the topic. Cluster and simple random sampling techniques were used in the sample selection for the study. The study targeted a total of 259 Administrators in Nairobi County with the sample size of 155 finally arrived at. Closed ended questionnaires was used to collect data. Both descriptive (standard deviation, mean) and inferential statistics (correlation and hierarchical multiple regression model) were used. The findings of the study revealed that strategic direction (β = 0.696, p =0.001, <0.05) risk taking (β = 0.352, p =0.025, <0.05); and innovative capabilities (β = 0.745, p =0.000, <0.05) had positive and significant effect on organizational performance. Core competence exploration (β = -0.847, p =0.000, <0.05) was negative but had a significant effect on organizational performance. The moderator (institutional culture) was found to have a positive and significant effect on organizational performance (β = 0.832, p = 0.000, <0.05). Further, institutional culture moderates the relationship between strategic direction setting (β = -1.150, p = 0.000, <0.05) risk taking (β = -2.005, p = 0.000) and innovative capabilities (β = - 1.182, p = 0.018, <0.05) and employee performance while it does not moderate the relationship between core competencies exploration and employee performance (β = - 0.170, p = 0.575, >0.05). The study concludes that strategic direction, risk taking and innovative capabilities had positive and significant effect on organizational performance while core competence exploitation had a negative and was not significant on organizational performance. Moreover, the study concludes that institutional culture moderates the relationship between strategic direction setting and innovative capabilities on organizational performance but does not moderate the relationship between risk taking and core competencies exploitation on organizational performance. The study recommends that, policymakers should implement cultural practices to increase performance of National Government Administration in the presence of strategic direction, risk taking and innovative capabilities.